.$116 Million Bond To Help Watsonville Hospital Approved For Ballot

The bond could help fund long-awaited upgrades and save the hospital $3 million a year in rent

On March 5, voters living in the southern portion of Santa Cruz County and a small part of north Monterey County will decide on a bond that would help the financially struggling Watsonville Community Hospital pay for a series of long-awaited upgrades.

The $116 million bond would also help the Pajaro Valley Health Care District (PVHCD) to purchase the building and land on which the hospital sits, thus saving $250,000 per month in rent.

The PVHCD Board of Directors on Wednesday unanimously approved the bond for the March ballot. If passed by a supermajority of 67%, it would add roughly $24 per $100,000 of assessed value for properties within the district.

Roughly a dozen people—a group that included doctors, nonprofit leaders and hospital workers—spoke in favor of the bond.

“My personal opinion is that the facility will not survive without the bond,” said Pharmacy Director Jennifer Uri Gavin, who has worked at the hospital for 29 years. “It’s critical and vital that the facility stay here.”

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Board member Marcus Pimentel said that the hospital is in a better financial shape than it was one year ago, having solved 80% of its debt with no layoffs, and additions such as a new cardiac catheterization laboratory.

But to keep that momentum going, Pimentel said, voters will have to approve the bond.

“We’ve got some brilliant, amazing ideas and we need the community’s help,” he said. 

Watsonville Community Hospital has been in dire financial straits since 2021, when leaders announced it was facing bankruptcy and would close unless a buyer came forth.

The Pajaro Valley Health Care District, formed in 2022, purchased the hospital and took control that year and has since been running on a deficit. 

According to newly hired CEO Stephen Gray, the institution is losing money on a monthly basis, with a total of $6.8 million so far this calendar year.

The money would expand and renovate the emergency room, and upgrade its MRI, X-ray and other imaging systems. It would also help replace roofs and plumbing.

Most importantly, it would allow PVHCD to purchase the physical building and surrounding property, which former owner Halsen Healthcare sold to Alabama-based Medical Properties Trust.

That would save the hospital approximately $3 million annually in rent.

This story will be updated.

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